• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock IBM Stock Shatters Expectations, Hitting a New All-Time High: A Buying Opportunity?
Stock

IBM Stock Shatters Expectations, Hitting a New All-Time High: A Buying Opportunity?

by January 26, 2024
by January 26, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

As a trailblazer in the tech industry, IBM stands out as an “OG” among corporate tech giants. Yet the company is far from turning into a relic. It continues to make significant progress distinct from its more progressive rivals.

IBM may not be the hippest among the tech bunch nor the most progressive (certainly not an AI play). Yet its strategy—focusing on providing software and services to corporate clients—has paid off, which makes it an attractive tech stock. Last week, IBM hit a new all-time high after reporting stellar earnings this past week. The stock broke above a rising multi-year trend channel (on a weekly chart scale) and spiked well above its upper Bollinger Band® on the daily chart.

Let’s look at the five-year weekly chart of IBM’s stock price (see chart below).

CHART 1. WEEKLY CHART OF IBM STOCK. The stock traded within a wide trending channel for four years before breaking out.Chart source: StockCharts.com. For educational purposes.

On the left side of the screen, you’ll see that prices were already rising within a narrow channel prior to plunging during the COVID Crash of 2020. As IBM recovered, it began trending upward again, but this time within a much wider channel, roughly twice the size of the previous (2019) one. Within these five years, IBM has been trading upward, but at a volatile and slow pace.

But then things started to change in the latter part of 2023. IBM’s stock price moved above the longer-trend channel and into the ultra-bullish and parabolic move, culminating in this week’s 13% spike. Note, however, that the longer-term divergence between prices and buying pressure as measured by the Chaikin Money Flow (lower panel).

As in most cases, bullish momentum on parabolic moves such as this one can’t be sustained, but the overall uptrend can, given a significant “breather” or pullback. So, if you’re considering entering a position in IBM, it’s worth exploring where this pullback might lead the stock.

Let’s take a look at the daily chart.

CHART 2. DAILY CHART OF IBM. The stock price goes parabolic, but the CMF is declining, and there’s a price rejection from IBM’s all-time high.Chart source: StockCharts.com. For educational purposes.

After a three-month basing period from February to May last year, IBM resumed its uptrend, pulling back again in September, only to shift gears on a bullish breakaway gap at the end of October.

IBM closed above the upper Bollinger Band on January 12 and kept riding that line until January 24, when it was slated to report earnings after the close.The stock gapped up to open on January 25 following a stellar earnings report.Though IBM closed higher and above the upper band, note the significant price rejection from the high of 196.9.In addition to the RSI placing IBM’s price in overbought territory, note the decline in buying pressure measured by the CMF; both suggest that a pullback is more or less imminent.

So, when might be a favorable time to start loading up on IBM shares? It might be tempting to think it’s too late to invest when a stock reaches a new peak. However, it’s important to remember that stocks’ value fluctuates, especially when the surge is this steep. So, it’s best to exercise patience and wait for a pullback, as those pullbacks present favorable entry opportunities.

Bottom Line: Keep Your FOMO in Check

Checking out IBM’s stock chart, you’ll notice moments in its uptrend where the price dipped back to the middle Bollinger band before bouncing back up. Also, price fluctuations occur within the Bollinger band 95% of the time, suggesting that IBM’s current high is a 5% outlier and bound to fall back toward the middle band. This will likely happen; you might want to give it a few days.

Also, you might want to set a price alert at around $182.50, which is the middle of IBM’s runaway gap. Gaps tend to get filled. While that level may still be too high a price level to go long, setting an alert will at least tell you when to begin closely monitoring the stock. You could wait for IBM’s stock price to fall toward the middle band and wit for a bounce with strong momentum before entering a long position.

How To Set a Technical Price Alert

Setting a technical alert at these support and resistance levels would be helpful as you weigh your potential entry points against any market developments that may influence your decision.

To access the Technical Alert Workbench, follow these steps:

Log in to your StockCharts account.At the top of any page, click on Your Dashboard.Click the Alerts or the New button in the Your Alerts panel.Choose which type of alert you want to create from the Alert Type buttons at the top left. To create a price alert, select Price Alert as the alert type.Add IBM in the symbol box and set your price trigger.Choose how you wish to be notified and click the Save Alert button.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • Bearish Signals & Risk Management: Protect Your Portfolio!
  • Market Up & Down — Don’t Try to Push Your Trades!
  • The Wisdom of Jesse Livermore, Part 4
  • Two Key Groups Take a Turn for the Worse
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Value Stocks Continued Strength Might Depend On One Area Of Transports
next post
The Hoax of Modern Finance – Part 5: Flaws in Modern Financial Theory

You may also like

The Sign of Strong Charts Getting Stronger

November 14, 2024

Are You Ready for a Huge Selloff?

August 19, 2023

Breadth Thrust Can Validate a New Bull Phase for Stocks

June 14, 2024

Here’s My Most-Likely Scenario for QQQ

September 13, 2024

Long-Term Bond Rally On the Way

November 9, 2023

Six-Month Period of UNfavorable Seasonality Begins Next Week

April 28, 2023

2023 Stock Market Forecast: Where’s the Strength?

January 19, 2023

DP Trading Room: Six-Month Period of Favorable Seasonality Begins Now!

November 4, 2024

Think Really Hard About Who You Want On Your Team

December 16, 2023

Now That “Stagflation” Has Gone Mainstream

April 28, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    These Sectors are Showing Strength as...

    May 21, 2024

    DP Trading Room: Semiconductors – SOXX...

    March 11, 2024

    The Halftime Show: Are Broadline Retailers...

    August 9, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here